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HQ 735070


October 26, 1993

MAR-2-05 CO:R:C:V 735070 RC

CATEGORY: MARKING

District Director of Customs
Detroit, Michigan 48226-2568

RE: Application for Further Review of Protest No. 3801-2-101117 concerning country of origin marking for imported badges, emblems, and motifs; marking duties; marking notice.

Dear Sir:

This is in response to your memorandum dated March 25, 1993 forwarding the Application for Further Review referred to above, submitted on behalf of the importer (Redman Awards). The importer protests your decision to assess marking duties in connection with an entry of imported badges, emblems, and motifs.

FACTS:

Entry for 13 cartons containing emblems imported from Haiti was made on February 4, 1991. Subsequent entries were made on February 14 and March 21, 1991. Customs released the cargo after a "general" examination, i.e. without physical examination. Customs issued a CF 28 on May 3, 1991, requesting samples. A sample was received by Customs for inspection on May 15, 1991, marked "U.S.A. MATERIALS, ASSEMBLED IN HAITI". On January 13, 1992, Customs issued a CF 29, Proposed Notice of Action advising that 10% marking duties will be assessed because the merchandise is defectively marked as "U.S.A. MATERIALS, ASSEMBLED IN HAITI" when in fact it was manufactured in Haiti from U.S.A. materials. On February 21, 1992, marking duties were assessed in the amount of 10 percent of the dutiable value of the merchandise. The entry was liquidated on March 20, 1992. Protestant claims that the assessment of marking duties was improper believing the marking satisfies the requirements of 19 U.S.C. 1304 and that Customs is precluded from assessing marking duties because a marking notice was not issued. Furthermore, Protestant seeks relief based upon Protestant's prior record of consistently curing any marking which Customs found improper in a timely manner, that is, upon receipt of marking notices. A sample emblem was submitted for our review.

ISSUES:

1) Whether the marking "U.S.A. MATERIALS, ASSEMBLED IN HAITI" is acceptable.

2) Whether Customs may assess marking duties without the issuance of a CF 4647, marking notice.

LAW AND ANALYSIS:

Section 304 of the Tariff Act of 1930, as amended (19 U.S.C. 1304), provides that, unless excepted, every article of foreign origin imported in to the U.S. shall be marked in a conspicuous place as legibly, indelibly, and permanently as the nature of the article or container will permit, in such manner as to indicate to the ultimate purchaser in the U.S. the English name of the country of origin of the article. Part 134, Customs Regulations (19 CFR 134), implements the country of origin marking requirements and exceptions of 19 U.S.C. 1304.

Subheading 9802.00.80, HTSUS, provides a partial duty exemption and allows special wording to indicate the country of origin marking for:

[a]rticles assembled abroad in whole or in part of fabricated components, the product of the United States, which (a) were exported in condition ready for assembly without further fabrication, (b) have not lost their physical identity in such articles by change in form, shape, or otherwise, and (c) have not been advanced in value or improved in condition abroad except by being assembled and except by operations incidental to the assembly process, such as cleaning, lubricating and painting.

The words "Assembled in" may be utilized as part of a country of origin marking only when the imported articles are eligible for entry under subheading 9802.00.80, HTSUS. See 19 CFR 10.22 and HRL 731507, October 17, 1989. On November 15, 1989, Customs issued ruling letter NY 847044, regarding the tariff classification of embroidered emblems imported by the Protestant. The ruling indicated that processes such as embroidering and cutting felt squares to shape would be considered manufacturing processes rather than an assembly and that the imported articles were not eligible for subheading 9802.00.80, HTSUS treatment. The emblems which are the subject of this protest were processed in Haiti in this manner. Consequently, the marking "Assembled in Haiti" is not acceptable. The goods must be marked with words such as:

(2) "Made in Haiti"

According to the Protest, the importer believes the marking is proper and, to support this claim, cites 19 CFR 134.36, "marking when the name or locality other than the country of origin appears." We think the importer meant to cite 19 CFR 134.46 which sets forth the requirements for marking when the name or locality other than the country of origin appears. Under this provision, if the emblems were to identify the U.S. materials, the country of origin would need to be preceded by "Made in" or "Product of". Under 19 CFR 134.36(b), articles or
containers bearing misleading markings are prohibited; this section would weaken Protestant's claim. Regardless, neither provision is quite applicable, here.

According to 19 U.S.C. 1304(f), 10 percent marking duties shall be levied, collected and paid if an imported article is not properly marked with the country of origin at the time of importation and such article is not exported, destroyed or properly marked under Customs supervision prior to liquidation. Under this provision, such duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause.

In HQ 731775 (November 3, 1988), Customs ruled that two prerequisites must be present in order for it to be proper to assess marking duties under 19 U.S.C. 1304(f). These two prerequisites are:

1. the merchandise was not legally marked at the time of importation, and

2. the merchandise was not subsequently exported, destroyed or marked under Customs supervision prior to liquidation.

In this case, both prerequisites cited above are present. The record indicates that the subject merchandise was not legally marked at the times of importation.

Protestant claims that the assessment of marking duties is inappropriate because Customs did not issue a marking/redelivery notice, CF 4647. We disagree. As indicated above, 19 U.S.C. 1304(f) specifies that marking duties shall not be remitted wholly or in part nor shall payment thereof be avoidable for any cause. The fact that a marking notice was not issued does not preclude the assessment of marking duties. See A.N. Deringer, Inc. v. United States, C.D. 2408, 51 Cust. Ct. 21 (1963).

HOLDING:

Because the emblems are not eligible for importation under subheading 9802.00.80, HTSUS, the marking "U.S.A. MATERIALS, ASSEMBLED IN HAITI" is not an acceptable country of origin marking. The assessment of marking duties was proper due to the fact that the merchandise was not legally marked at the time of importation nor was it subsequently marked under Customs supervision prior to liquidation. Accordingly, the protest is denied. A copy of this decision should be attached to the Customs Form 19, to be sent to the protestant.

In accordance with Section 3A (11)(b) of Customs Directive 099 3550-065, dated August 4, 1993, Subject: Revised Protest Directive, this decision should be mailed by your office to the protestant no later than 60 days from the date of this letter. Any reliquidation of the entry in accordance with the decision must be accomplished prior to mailing of the decision. Sixty days from the date of the decision the Office of Regulations and

Rulings will take steps to make the decision available to Customs personnel via the Customs Rulings Module in ACS and the public via the Diskette Subscription Service, Lexis, Freedom of Information Act and other public access channels.

Sincerely,

John Durant, Director

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